SCHEDULE 13D/A: Major Shareholder Snow Phipps Group Increases Stake in Velocity Financial to 36.6% Through Cashless Warrant Exercise

Snow Phipps Group entities have significantly increased their beneficial ownership in Velocity Financial, Inc. to 36.6% by exercising warrants on a cashless basis, adding over 1 million shares.

Summary

• This Amendment No. 3 to Schedule 13D reports that Snow Phipps Group AIV, L.P., Snow Phipps Group (RPV), L.P., and Snow Phipps Group AIV (Offshore), L.P. (collectively, the 'Warrantholders') exercised their warrants in full on a cashless basis on March 27, 2025.
• As a result of the cashless exercise, Velocity Financial, Inc. issued a net aggregate of 1,080,338 shares of Common Stock to the Warrantholders.
• The exercise involved warrants with exercise prices of $2.96 and $4.94 per share.
• Specifically, Snow Phipps Group AIV, L.P. received 841,408 shares at $2.96 and 420,704 shares at $4.94.
• Snow Phipps Group (RPV), L.P. received 43,815 shares at $2.96 and 21,908 shares at $4.94.
• Snow Phipps Group AIV (Offshore), L.P. received 7,554 shares at $2.96 and 3,777 shares at $4.94.
• Following this transaction, as of March 31, 2025, the Reporting Persons (SPG GP, LLC, Ian K. Snow, and the SPG Fund Entities) beneficially own an aggregate of 13,353,103 shares of Velocity Financial Common Stock.
• This aggregate beneficial ownership represents 36.6% of the total 36,465,085 shares of Common Stock outstanding as of March 27, 2025, which includes the newly issued shares.

Sentiment

Score: 7

Explanation: The exercise of warrants by a significant shareholder, increasing their stake, generally indicates continued confidence and commitment to the company, which is a positive signal for investors.

Positives

• The exercise of warrants by a significant institutional investor group (Snow Phipps Group) demonstrates continued confidence and commitment to Velocity Financial, Inc.
• The cashless exercise mechanism allowed the Warrantholders to increase their equity stake without requiring additional cash outlay, potentially indicating a strategic long-term holding.

Future Outlook

The document does not contain any forward-looking statements or guidance regarding the company's future performance or strategic direction.

Industry Context

This filing primarily details a change in beneficial ownership by a major shareholder, rather than reflecting broader industry trends. However, a significant increase in a major investor's stake can be interpreted as a positive signal of confidence in the company's long-term prospects within its industry.

Stakeholder Impact

• Shareholders: The increased stake by a major institutional investor could be viewed positively, signaling strong conviction in the company's value and potentially stabilizing the shareholder base.
• Company Management: The continued commitment from a significant shareholder may provide stability and support for current management and strategic initiatives.

Key Dates

Keywords

Velocity Financial, Velo, SEC filing, Schedule 13D, beneficial ownership, warrant exercise, Snow Phipps Group, institutional investor, common stock, equity stake, shareholding, corporate governance